San Bruno alleges misconduct by regulator in PG&E explosion case

San Bruno city officials, furious over what they said were overly friendly communications between utility regulators and Pacific Gas & Electric Co. after a fatal 2010 gas pipeline explosion, called for a state investigation.

They asked the state attorney general's office and other state and local law enforcement agencies to investigate.

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The city is accusing California Public Utilities Commission President Michael Peevey with receiving "confidential, non-public information from PG&E regarding its internal deliberations and financial conditions outside of the CPUC public hearing process."

The city said Peevey's behavior was in violation of the commission's own rules forbidding private communications between parties and decision makers.

At a news conference on the steps of the PUC building in downtown San Francisco on Monday, San Bruno Mayor Jim Ruane called for Peevey's immediate removal from ongoing proceedings related to proposed penalties for the blast that killed eight and injured 66.

The commission's staff has proposed levying more than $2 billion in fines against PG&E for the explosion of a natural gas pipeline in the Bay Area bedroom community.

San Francisco-based PG&E is the state's largest investor-owned utility and supplies electricity and natural gas to most of Northern California.

The city's assertions about improper communications are based on 7,000 pages of PUC documents released by the commission to settle a city lawsuit under the California Public Records Act.

According to the mayor, the documents reveal that Peevey and top PUC and PG&E officials communicated frequently by email in violation of the commission's rules regarding private conversations between parties to official actions and regulators.

In one such email to PG&E's vice president of regulatory relations, Brian K. Cherry, Peevey calls the company's public relations strategy "inept" because it resulted in the media running "two big stories rather than one."

Such communications not only violate the law but "they provide evidence of a relationship between the utility and the CPUC that is familiar, collegial and cozy," the mayor said.

A PUC spokeswoman, speaking for the commission and Peevey, said her agency "takes seriously all allegations of bias and rule violations" and would evaluate the San Bruno legal motions after they are filed.

PG&E, in a letter to the city, said it also would review the emails.

"While we are required to communicate on a daily basis with the commission on a wide array of issues critical to our customers, we are absolutely committed to conducting ourselves in an ethical manner at all times," the company wrote.

A federal grand jury has indicted PG&E on 12 alleged criminal violations of the U.S. Pipeline Safety Act, involving poor record keeping and faulty management practices. The utility calls the charges unwarranted.